Keeping Hold of Property in Oz & Shipping Car Back to UK

[AH1984]

Hello everyone,

I have been dropping in and out of this forum for a few months now and want to say what a great help everyone’s advice has been.

 

A little bit of about my family and I.

My fiancée and I are both going through the citizenship process at present, hoping to have a date for the ceremony mid-year. We have two little ones, aged 3 and 5 months, Aussie born. We have loved our time here in Australia, but due to a combinationof factors, mainly aging parents back home in the UK who have had health issues over the past couple of years and who desperately want to spend more time with their Grandchildren and a weariness of the 15 hours commuting each week from Western to North Sydney, we are now planning on going home to Blighty once our citizenship is resolved. We are going to miss many things about Sydney and Australia and will be forever thankful for the many wonderful experiences we can treasure but we both feel it is now time. I am hoping, probably naively, to secure a secure a job before the move but appreciate this may not be possible. I work in the shipping industry so this ties well with our intended destination, North Lincolnshire, close to Hull, Grimsby and Goole, major hubs of the industry.

I did have a few questions that I was hoping someone may be able to offer some advice or past experience.

 

We are lucky enough to own our home and with the market in Sydney as obscene as it is, we are tossing up between selling now and using the equity to cover a considerable percentage of a new mortgage in the UK when the time is right, or holding onto it for a few years and hope the value continues to increase as investment in Western Sydney continues. I haven’t seen many comments on the forum from others who have held on to their homes when they went back to the UK and I’m wondering how much of a headache it might be. Does anyone have any advice on the tax implications of keeping a property overseas and also how they found the experience of managing a property from the other side of the world?!

 

Secondly, has anyone shipped their car to the UK? Have been a touch surprised at the cost of second hand cars of a comparable age and mileage and was thinking that if it was cheaper / roughly same cost to ship over that might be a better option. Just not sure what regulations we would have to comply with to make it road worthy in the UK. Obviously would need speedometer and mileage counter changed from km but is there anything elseto be aware of?

 

Thanks everyone, really do appreciate any advice you can offer.

[rosiew]

I'm not going to give an opinion on future house prices! However if it is important to you to get a mortgage soon after returning be sure to check out the various threads on that as there may be a delay in qualifying - may be worth bearing in mind if you would be cash buyers if you sold up here.

[Collie]

The answer is it depends on a number of things.

 

Ok - so do you own your home outright in Sydney? If you have a mortgage and the rent would be less than than the mortgage (allow a +2% increase in rates for stress testing), I would probably sellup. It would mean you adding to the rent to cover the mortgage from GBP and bearing a significant FX risk.

 

Having a loss making investment property from overseas makes no sense financially as you can't avail of negative gearing. I had a friend who did it for a few years and it was killing them financially in the UK due to the exchange rate. They eventaully sold before the bank reposessed as they struggled to make the payments from the UK.

 

If you own it outright or it will make a profit (be conservative - allow for vacancy periods, repairs etc), that may lead to a different desicion. You can let the rent accumulate in Australia to cover outgoings, tax etc My understanding is that you would need to include it in your Australian tax return and UK tax return but you would not be double taxed. ie you will receive a credit in the UK for any tax paid in Australia. I have another friend with 2 investment properties in Sydney, one is owned outright and one has a mortgage. Both have long term tenants (at slightly below market rents to keep good tenants). The rent from both properties is put to overpay the mortgage on the 2nd property and any repairs etc He leaves it all in Australia so no f/x risk and they will proabably retire to Melbourne eventually.

 

Another ? to ask is do you plan to return to Australia (not necessarily Sydney) in the future.

 

I would get the advice of a good tax accountant though. Worth spending a few hundred $ to know exactly the implications.

[bristolman]

As far as the car goes I would recommend selling as secondhand hand cars are usually considerably cheaper here, it just doesn't make financial sense unless the car is something very special.